Are you on track with retirement planning?

Jun 15, 2020.

It can sometimes be hard to imagine what you’ll be doing next year, let alone in five years, ten years or beyond. But when it comes to retirement, that just makes it even more important to start planning early. That way, you know you’ll be ready whatever life might throw at you.

That means getting informed and making plans as soon as you can. If that sounds a little daunting, here’s a checklist to help get you on the right track.



1. Understand your retirement goals

Remembering to account for inflation (3%-5% per year), decide when you want to retire and work out what your target monthly retirement income needs to be at that age. This should include bills and lifestyle spending, as well as health and care costs.



2. Check your existing retirement, savings and investment accounts (if you have any)

Accounting once more for inflation along with taxes and potential lifestyle changes, as well as the policies, terms and conditions of your accounts, work out the income your various accounts will provide at your retirement age if you continue as you are. Of course, this is unlikely to be 100% accurate, so be conservative to avoid any nasty surprises down the line.



3. Understand the shortfall

Unless you’ve been very much on the retirement ball, chances are the figure from step two won’t match your target income from step one – especially if you’ve yet to start saving. But, don’t panic! This is what most people find when they do the sums for the first time. And that’s empowering – because now you can make a plan to close the gap. Speaking of which...



4. If you haven’t already, set up a retirement fund

You can do this through your employer or privately. In either case, this is a vital first step for any retirement plan.



5. Figure out how much more you need to save each month to plug the gap

Whether you’re increasing your existing contributions or just getting started, there’s a number you need to hit for your monthly retirement savings that’ll make your projected retirement income match your target income. So, figure out what that is and, if you can, increase your contributions accordingly. Getting an online pension estimate can be helpful for this.


6. Make a plan to get debt-free

If you can’t afford the contributions you need to reach your retirement goals, you’ll have to start making some changes. The most important of these is to work on paying off your debts, if you have any – the longer you take to pay them, the less you can afford to contribute to your retirement fund. And, of course, you won’t want to be in debt when you retire.



7. Consider lifestyle adjustments

If your retirement goals are still out of reach, it might be worth making changes to your lifestyle so that you can either save more now or won’t need as big an income when you retire. For instance, you might consider downsizing or planning to continue working part-time after your official retirement date.



8. Consult a pension advisor

Whether you want advice on the most efficient ways to save for retirement or just want to get a second opinion on your existing plans, consulting a professional is well worth doing to be sure you’re on the right track.



9. Automate your retirement contributions

Not only does this mean less hassle, but it will also help you stay on track by saving you from having to remember to make your payments. If you have a pension through your employer, they’ll usually deduct your contribution from your salary automatically. But if you have any private retirement funds, be sure to set up automated payments from your bank account.



10. Create an emergency fund of three months’ income

When you retire, there can occasionally be delays in your retirement income kicking in. Having an emergency fund gives you a buffer should this happen to you.



11. Review your accounts and projected income regularly

Even once you’re on track with your contributions, circumstances outside of your control can increase the retirement income you need or reduce the income your investments are projected to provide. So, check your accounts and projections regularly and make adjustments, if needed, to be sure of staying on track.


Retirement might look a long way off, but it pays to have a plan in place – find out more about our pension and investment products here.